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Be careful what you wish for; record high gold prices are possible, but at what cost?

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(Kitco News) - Fundamental factors are still in place to push gold prices up, but momentum will not be sustained without price corrections along the way, this according to Peter Hug, global trading director of Kitco Metals.

“If you use the argument based on our global debt, [gold bulls are] right, gold should be higher than where it is at $1,500 and I think the day will come when gold will surpass the 2011 high,” Hug told Kitco News.

Hug noted that should gold run “in a straight line” to above $2,000 an ounce, it would imply a serious issue in other areas of the markets, either in equities or bonds.

On the planned meeting with President Donald Trump and Chinese vice premier Liu He, Hug said that a deal in favor of Trump will be unlikely.

“I think there is going to be a concessionary deal struck, at least I hope so…where the Chinese may buy some egg products. The U.S. may not drop tariffs but may delay implementing the increase that’s due at the end of next week, so just they both can walk away with somewhat saving face,” he said.

Importantly, Trump needs a “win” in his negotiations with China, especially amidst the controversy with Ukraine and the threat of impeachment, although it is unlikely the Republicans would approve the decision to impeach, Hug said.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.